Athens-Clarke County commissioners voted Tuesday to place a cap — of sorts — on the share of hotel-motel tax revenue that can be claimed by The Classic Center and the Athens Convention & Visitors Bureau for the upcoming fiscal year.

The 7-2 commission vote for the cap on the CVB’s and the downtown convention and performance space’s share of hotel-motel tax dollars came after a stream of Classic Center representatives, CVB personnel and local hoteliers argued against putting any limit at all on the entities’ share of hotel-motel dollars.

Their arguments focused largely on the hundreds of new hotel rooms either under construction or planned for the downtown Athens area and at other places in the community, and the need for the Classic Center and the CVB to market the facility, its offerings, and other tourism opportunities to help ensure Athens hotels can maintain profitable occupancy rates.

Angela Smith, general manager of the Hyatt Place now under construction at The Classic Center — the hotel is physically connected to the convention facility — contended that "limiting the engine that drives this healthy impact … would be detrimental" to the community.

However, with Commissioners Diane Bell and Harry Sims dissenting (Commissioner Andy Herod was not at Tuesday’s meeting), the commission decided that the Classic Center and the CVB could maintain their claim to the vast majority of hotel-motel tax dollars — a combined 6 percentage points of the 7 percent local levy on lodging services — but only up to a total of about $2.66 million.

That funding represents what county finance officials project will be raised through 6 of the 7 percentage points of the tax. The county projects that the 7 percent tax will raise $3.1 million in the fiscal year beginning July 1.

According to David Boyd, director of the county’s finance department, that projection factors in the new hotel rooms expected to come to Athens within the upcoming fiscal year — 350 new rooms was an estimate discussed among hoteliers and other hospitality industry professionals on Tuesday. But, Boyd added, the county’s hotel-motel tax revenue projection does consider factors such as weather, which could delay construction of some new hotel space. And, Boyd said, the estimate also considers occupancy rates, and recognizes that not all of those new rooms will be in place for the entirety of the fiscal year.

In the years prior to Tuesday’s commission decision, The Classic Center and CVB had been entitled to 6 percentage points of the actual revenue generated by the 7 percent levy, rather than the county’s projections of that revenue. The county’s projections consistently have been lower than actual hotel-motel tax revenues.

Under the cap instituted Tuesday, The Classic Center would receive about $1.68 million in hotel-motel tax revenue for the fiscal year beginning July 1, with the Convention & Visitors Bureau getting $974,020. Revenue from the remaining 1 percent of the tax, projected at $441,000, would go to the county’s Economic Development Department and various community events, with remaining funds of approximately $200,000 going into the county government’s general operating fund.

Prior to the commission’s vote, Charlie Maddox, chairman of the Classic Center Authority — the county-appointed group that oversees the center’s operations — invoked the physicians’ Hippocratic Oath in urging commissioners not to institute a cap on hotel-motel tax revenues.

"As the Hippocratic Oath says, ‘Do no harm,’" Maddox urged.

Chuck Jones, director of the CVB, called disbursement of the hotel-motel tax "an essential investment in economic development," and made the point that new hotel rooms coming to the city will mean that the CVB will have additional work to do in attracting visitors to Athens.

Doc Eldridge, president of the Athens Area Chamber of Commerce, argued that the local hospitality industry deserved the support of a full measure of hotel-motel tax revenue, saying that the industry "provides a lot of jobs" in Athens, along with "upward mobility opportunities."

The cap for the upcoming fiscal year’s hotel-motel tax receipts was initially proposed by Commissioner Sharyn Dickerson as a means of recouping the $200,000 included in the county budget approved Tuesday by the commission to assist in efforts to attract sustainable commercial air service to Athens-Ben Epps Airport. Two air carriers have recently expressed interest in coming to Athens, one of which would fly to New York, and another which would fly to an as-yet-undetermined "hub" airport where local passengers could connect to flights on major airlines.

The "cap" instituted Tuesday by commissioners would not reduce revenue going to The Classic Center and CVB, a couple of commissioners noted prior to the commission vote. Commissioner Kelly Girtz noted that in the 2016 fiscal year — the 2017 fiscal won’t end until June 30 — the center and the visitors bureau got $2.35 million in hotel-motel tax revenue. Similarly, Commissioner Jerry NeSmith noted that the current fiscal year’s budget steers $1.52 million to The Classic Center.

In a Wednesday interview, Cramer countered that argument by noting that the 10 percent increase in the hotel-motel tax allocation between this fiscal year and the coming fiscal year is more than balanced by "a 25 percent increase in the supply of hotel rooms."

While the cap instituted Tuesday won’t necessarily remain in place for ensuing fiscal years, commissioners who favored the cap on hotel-motel tax disbursement to The Classic Center and the CVB hinted strongly that they would like to see revenue from the levy spread to other economic development initiatives.

"The economic development puzzle has many pieces in it," Girtz said.

Dickerson suggested that Tuesday’s decision might not necessarily put a strict limit on local revenue going to The Classic Center and CVB. It’s always possible, Dickerson said, that if the center or the CVB has a demonstrated need during the upcoming fiscal year, the commission could consider allocating some contingency funding to that need.

Cramer said Wednesday that The Classic Center routinely adopts "an aggressive marketing plan" each year, anticipating a high end of hotel-motel tax revenue, and adjusts those plans based on actual hotel-motel tax receipts. The center will make those adjustments this year based on Tuesday’s decision.

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